GBC Reports..., June 19, 2003

Governor Issues Executive Order on Procurement
This week Governor Pataki, under a great deal of media pressure, issued a new Executive Order (#127) that would require state agencies, public benefit corporations and public authorities (where the Governor makes at least one appointment) to reveal the name of anybody retained, employed or designated by a contractor to attempt to influence the procurement process. Procurements involving more than $15,000 for goods and services; the purchase, sale, lease or other interest in real estate; and public work are covered. Procurements required by law to be awarded to the lowest responsible bidder are not included in this Order. OGS is charged with developing guidelines on this order within 45 days and it is effective on all solicitations made 60 days after the order's effective date, which is June 16, 2003 when it was issued. 

What are the implications of all this? It is probably too early to tell. This may have an impact on architect, engineering and construction management services and any construction procurement not now covered by the competitive bidding laws. Compliance will be monitored by the Office of the Inspector General and the State Ethics Commission. One provision seems to allude to the fact that any effort over a previous five-year period to conceal the use of a person to influence a procurement without proper reporting will be deemed irresponsible and the contractor will be ineligible to receive an award. 

What is this all about? Albany has been abuzz for a few years about lobbyists hired to influence state agencies on procurement actions, but not legislative actions. Legislative lobbyists are required by law to be registered. So-called procurement lobbyists are not so required. This order effectively will put more sunshine on the process. Whether it will change any behavior or influence on many of these covered procurements, only time will tell. GBC intends to offer comment on the Order and the guidelines when they are produced. Copies of the order are available by fax from GBC and will soon be on the GBC website when the order is available electronically. 


Legislature Moves Toward Recess
By the end of this week, the Legislature plans to conclude its 2003 regular session. We are working on several issues. Here is an interim report. A final version will be provided next week when the dust settles. 

Labor Law 240: The most important first. The trial lawyers and labor lobbyists know they are in a fight. They have spent some real money and time with billboards on the Interstate near the Capitol and radio ads against our efforts to "repeal" the Scaffold Law. "Don't Let People in High Places Endanger People in High Places" is their slogan. All this tells us is that the GBC and many others in the construction industry are having an impact. 
That is the good news. Unfortunately, at this writing, it does not look like any bills will move this week on 240 and maybe not on any of the other tort issues that are hot, including vicarious liability for the auto manufacturers and medical malpractice reform for the doctors. Having said that, our legislative sponsors are convinced we are having an impact and there is a chance for success before the end of the year. As the GBC Board of Directors has instructed, we shall persist on this very important issue.

Procurement Issues: The laborers are pushing a bill to tighten the definition of low responsible bidder. At the same time, the bill may expand prevailing wages to IDAs and other economic development projects, will require responsibility determinations on all subcontractors as well as contractors and then will require all the information you provide for this purpose to be public (S.3607 Spano/A.8264 John). GBC is interested in strong responsible bidder standards, but this goes way too far. Another interesting bill (S.4841 Liebell) would allow DASNY to prequalify contractors, a right they do not currently have. Other agencies have sought this privilege also. This is an issue that will require a policy review by the GBC Board. In Connecticut there is now a bill on the Governor's desk, supported by the contractor community, to allow prequalification there. 

Prevailing Wages: It wouldn't be the end of the legislative session if there weren't several labor-oriented amendments to the prevailing wage laws. One bill, under the guise of requiring prevailing wages and enforcement on projects done by private parties as part of an economic development project (i.e. roads and bridges and the like), could extend that law to all IDA and economic development work (S.4377-B/A.8293-A). Another could require another sign-in/sign-out scheme (S.3766/A.8180). Two others would clearly make all payroll records public (S.4610/A.8486 and A.8228). Then there are two bills to significantly increase the penalties under prevailing wages including direct right of action and triple damages (S.5469/A.8704 and S.850-A/A.8148). All of these are in one state of passage or another. Next week we shall sort out those that passed and provide greater detail. 

Other Issues: There are also discussions going on about brownfields reform, which could help economic development efforts; mental health inclusion in health insurance policies, which would be very costly; noise control on SUNY construction projects; development of mold standards and strengthened whistleblower legislation from the Attorney General. Two major projects that are getting a lot of press coverage include the DestiNY project in Syracuse and the Albany Convention Center. DestiNY is looking for some incentives and the Albany Convention Center Authority may be created to oversee that project. 


Legislative Update on GBC Website
You can now find news on the legislative issues GBC is following most closely on our website, www.gbcnys.agc.org. Click on "Legislative Issues." You'll find brief summaries of the issues, links to the bills themselves, and GBC's memos in support or in opposition.


Member News
GBC Specialty Member Postler & Jaeckle Corp. (Rochester) is proud to announce a significant milestone reached in March 2003: One million hours worked without a lost time accident! More than two years of work performed by all Postler & Jaeckle Corp. employees contributed to this tremendous achievement. Congratulations!

Lehigh Construction Group (Orchard Park) and the OSHA Buffalo area office have signed an alliance to promote workplace safety and health among construction students. They plan to disseminate information and training on safety through school job fairs, print and electronic media, and building trades curricula in western New York vocational schools.


Welcome New Members!
We're pleased to welcome the following new Associate Members:
Nixon Peabody LLP, Rochester. Represented by Michael Hausknecht, Partner.
Tunstead, Schechtel & Czik, Jericho. Represented by Jayne Czik, Esq.


Another Successful GBC-State Agency Get-Together
Since last summer, GBC has been having executive-level joint discussions with the leaders of the three major state building agencies - DASNY, SUCF, and OGS. We had the third of those successful meetings last week. The discussions centered on the current programs of the three agencies after passage of the state budget, the need for better communications among contractors and owners and their staffs, prospective project manager training programs that both groups might participate in and a host of legislative issues of mutual interest. In terms of future markets, all three agencies felt their work levels would be somewhat stable in the near future. SUNY, particularly, is in the midst of seeking approval of a new capital plan from the Legislature. 


OGS Payment for Stored Materials
We have come to learn recently that OGS will pay for material stored off site only if the contractor pays for the material up front and provides with the payment application a copy of the paid receipt. OGS is apparently under the false impression that the law requires this and that other agencies also require paid receipts. GBC has expressed grave concern over this requirement and pointed out that the law does not require it. At our meeting with OGS, DASNY and SUCF last week, it was made clear that only OGS requires this. GBC even pointed out that it is not in anyone's interest (except the supplier) to hold no retainage on this equipment.

OGS has promised a hard look at this matter and we are hopeful for some relief.


"Approval" of Delegated Design Still a Question
You may recall an April 16, 2003 GBC Reports article regarding the issue of "approval" or the lack thereof from the designer of record on delegated design submittals. In that case, the New York City Engineering firm Cantor Seinuk Group's feet were held to the fire by the State Education Department demanding the term "approval" be used, as opposed to words seeking to shield Cantor Seinuk from liability. Now, State Ed has apparently reversed itself and has stated that stamps to the effect of "no exceptions taken" are in compliance with the Regents Rule demanding "approval." GBC and the Empire State Subcontractors Association don't agree, and we have requested a meeting with State Ed. In preparation for that meeting, we're curious: What is the practice in the marketplace these days? To what degree are you seeing design delegated to or through you and, when delegated, what do the stamps say?


NYS and NYC Sales Tax Increased
Just a reminder: As part of the new State Budget, effective June 1, 2003, the NY State sales and use tax rate increased from 4% to 4.25%. Effective June 4, 2003, the NY City sales and use tax rate increased from 4% to 4.125%. Adding the .25% Metropolitan Commuter Transportation District tax to the formula, the combined state and local tax rate imposed in NY City is 8.625%. 

The State has provided a special transitional provision for pre-existing lump sum or unit price construction contracts. Material purchases made before June 1 will pay the lower rate. Material purchases after June 1 pay the higher rate. Contractors who irrevocably entered into a pre-existing lump sum or unit price construction contract before May 15 may receive a credit or refund of the additional .25% state sales and use tax paid on or after June 1. This credit or refund applies only to purchases of tangible personal property used solely in the performance of such contract. 

Likewise, NY City has provided a similar special transitional provision for material purchases made before or after June 4. Contractors who irrevocably entered into contracts before June 4 may apply for a credit or refund of the additional .125% NY City sales and use tax paid after June 4 on purchases of tangible personal property used in the performance of the contract. 


More Time to Comply with New Spill Rules
Construction sites that store or use large amounts of oil (more than 1,320 gallons) will have an additional 18 months to meet the newly revised oil spill prevention and control regulations, according to a final rule published by EPA on April 17, 2003. The rule extends the deadlines for owners and operators of construction sites to modify, if necessary, and implement site-specific Spill Prevention Control and Countermeasure (SPCC) plans that comply with the amended requirements. AGC plans to meet with EPA in the coming weeks to discuss clarifications and changes that should be made to the controversial rule. 


Upcoming Events
Please check the GBC Calendar for a complete list of upcoming events, with links to registration forms.